Weekly Health Care Policy Update – May 23, 2025

May 30, 2025

In this update: 

  • Legislative Update
    • House Passes One Big, Beautiful Bill Act
  • Administration Update
    • U.S. District Judge Blocks Trump Administration’s Public Health Cuts to States
  • Other Updates
    • HHS/DoL/Treasury Issue RFIs and Guidance on Price Transparency
    • CMS to Audit MA Plans Annually
    • CMS Announces ACO REACH Model Changes
    • NIH Director Lays Out Five-Point Agenda; Says NIH Research Caused Pandemic
    • FDA Changes Key Covid Vaccines Policies
    • HHS Sets Most-Favored-Nation Pricing Target Price
  • New York State Updates
    • Governor Hochul Provides Update on Impact of House Budget Reconciliation Package to NYS
    • DOH Submits Final 1115 Waiver Amendment Request to Expand Workforce Program and Medicaid Buy-In for People with Disabilities
    • DOH Adopts Final Regulations on In-Person Requirements for Prescribing Controlled Substances
    • Willow Baer Confirmed as Commissioner of OPWDD

Legislative Update

House Passes One Big, Beautiful Bill Act 
On May 22nd, the House passed the “One Big, Beautiful Bill Act” by a vote of 215-214, following a 21-hour Rules Committee markup. House leadership made several last-minute changes to the reconciliation package passed out of the Budget Committee on Sunday night to garner the necessary votes for floor passage. SPG covered the original version of the Energy and Commerce provisions here and the original version of the Ways and Means provisions here.

Changes in the version passed by the House were mostly at the behest of fiscal conservatives. Major changes to the health care provisions include: 

  • Moving up the effective date of various Medicaid eligibility modifications to December 31, 2026, including:
    • Mandatory Medicaid work requirements;
    • Requiring eligibility redeterminations every six months for adults covered by the Medicaid expansion;
    • Limiting retroactive coverage in Medicaid from three months to one month.
  • Eliminating the discretion of future administrations to waive work requirements for certain populations;
  • Banning coverage of gender-affirming care for adults (in addition to children) in Medicaid;
  • Enabling states that do not expand Medicaid coverage to make state-directed Medicaid payments that are up to 110% of the Medicare rate (Expansion states would be limited to 100% of Medicare);
  • Funding the cost-sharing reduction payments to insurers on the ACA Marketplace exchanges; and
  • Modifying the criteria for states whose federal Medical Assistance Percentage (FMAP) for the Expansion population would be reduced from 90% to 80% if they offer health coverage (or financial assistance for coverage) to undocumented people. Specifically:
    • The reduction would now also apply to states who offer coverage to people who are “paroled into the United States” for at least one year, but have not been granted asylum. Such people have traditionally been considered lawfully present and potentially eligible for Medicaid.
    • The reduction would not apply to states who offer coverage only to undocumented children or pregnant women. Most states offer some form of Medicaid coverage to these populations.
    • The reduction clarifies that individuals who have been subject to domestic abuse may be covered, if the state in question has established a “substantial connection” between this abuse and the need for benefits.

The Congressional Budget Office has not issued final cost and coverage estimates on the new version of the bill. However, coverage losses are likely to grow substantially given the earlier

The bill now heads to the Senate for consideration and potential additional amendments. The Senate is not expected to hold markups but rather to negotiate as a conference and directly with the White House. Senators are likely to take issue with a number of the House bill’s provisions, including cuts to Medicaid and SNAP, cuts to clean energy credits, pieces of the tax title, and the overall cost. The reconciliation bill will also be subject to the “Byrd bath” which requires that all provisions have a budgetary impact. Senate leadership has indicated their desire to put the package on President Trump’s desk by July 4th.

The bill language is available here.

Administration Update

U.S. District Judge Blocks Trump Administration’s Public Health Cuts to States
On May 16th, Judge Mary McElroy of the U.S. District Court for the District of Rhode Island indefinitely blocked the Trump Administration from clawing back over $11 billion in Covid-19-related public health funding for state and local health departments. This ruling bodes favorably in the suit launched by 23 states and the District of Columbia to stop mass cuts to a pandemic-era funding stream that has evolved to serve the unique public health needs of localities, including infectious disease tracking, mental health and substance use treatment, and vaccine access. Judge McElroy directed the Trump Administration to “take every step necessary to effectuate this order,” including dispersing congressionally appropriated funds to the localities named in the suit.

Federal Agencies

HHS/DoL/Treasury Issue RFIs and Guidance on Price Transparency 
On May 22nd, the Departments of Health and Human Services, Labor, and the Treasury jointly issued two Requests for Information (RFIs) and two guidance documents related to health care price transparency. The first RFI seeks public input on how to improve prescription price drug transparency, including price disclosure requirements, health plan reporting, and state approaches and innovations. The agencies also released updated guidance for health plans that sets an applicability date for publishing an enhanced technical format for disclosures.

The Centers for Medicare and Medicaid Services (CMS) issued a second RFI seeking feedback on how to improve hospital compliance and enforcement with price transparency requirements, including processes to ensure that the pricing information in the machine-readable file is accurate and complete. CMS also issued new guidance to “ensure that hospitals provide meaningful, accurate information about their charges for health care items and services.” The guidance includes information on encoding payer-specific standard charge dollar amounts and contract methodologies, as well as calculating the “estimated allowed amount” and discontinuing use of nine 9s.

The joint RFI is available here. The joint guidance is available here. The CMS RFI is available here. The CMS guidance is available here.

CMS to Audit MA Plans Annually 
On May 21st, the Centers for Medicare and Medicaid Services (CMS) announced a “significant expansion of its auditing efforts” for Medicare Advantage (MA) plans. CMS will conduct Risk Adjustment Data Validation (RADV) audits for all eligible MA contracts, for each payment year, beginning immediately. CMS will also invest in additional resources to complete audits for previous payment years (2018-2024), on which the agency is currently several years behind. The additional resources will include enhanced technology and workforce expansion, and will supposedly allow CMS to increase its productivity from 60 audits to 550 audits (all plans) per year. The CMS announcement notes that the Medicare Payment Advisory Commission (MedPAC) estimates that MA plans may overbill the government by as much as $43 billion per year.

The announcement is available here.

CMS Announces ACO REACH Model Changes
On May 21st, the Centers for Medicare and Medicaid Services (CMS) announced changes to the ACO REACH program to improve the model’s financial sustainability. Key changes, all beginning for Performance Year 2026, include: 

  • modifying risk score growth constraints;
  • reducing the regional component of the benchmark for all REACH ACOs;
  • narrowing the first risk corridors to 10% for participants in the global track;
  • increasing the quality withhold from 2% to 5% while proportionally increasing the High Performers Pool bonus;
  • updating the risk adjustment model by increasing the weight of HCC v28 to 100%; and
  • adjusting PY 2024 expenditures for significant, anomalous, and highly suspect billing.

Additional details on the changes are available here.

NIH Director Lays Out Five-Point Agenda
On May 19th, National Institutes of Health Director Jay Bhattacharya hosted his first staff town hall. Since the beginning of the Trump Administration, the NIH has lost roughly 2,500 of its 20,000-person staff to layoffs, retirements, and other departures. Bhattacharya expressed disappointment about the layoffs, saying there was no transparency about how the decisions were made. Among his priorities, the new Director listed chronic disease, supporting reproducibility, backing “edge science,” and encouraging scientific freedom. Notably, he also said he wanted to stop gain-of-function research, suggesting that it was possible that the agency had funded research that could have caused the Covid-19 pandemic.

FDA Changes Key Covid Vaccines Policies  
On May 20th, Food and Drug Administration (FDA) Commissioner Dr. Marty Makary and Center for Biologics Evaluation (CBER) Director Dr. Vinay Prasad published an article in TheNew England Journal of Medicine offering a new strategy for Covid-19 vaccination. The FDA will move to require vaccine manufacturers to conduct large-scale, randomized control trials on the safety and efficacy of vaccines for children and healthy adults. The FDA plans to prioritize access for adults 65 years and older and other patients at risk for serious complications, between 100 and 200 million Americans, per the article.

According to FDA leadership, this move aligns the U.S. with other high-income countries. Until now, annual Covid-19 shots were recommended for everyone aged 6 months and older. The move has largely split experts, with some believing that more stratified, risk-based recommendations are due and others expressing concern over additional barriers to approval. It is unclear how this new approach will affect vaccine availability come fall.

A day after the announcement, Moderna announced that it would voluntarily pull its licensing submission for its combination seasonal influenza-Covid mRNA vaccine candidate so that it can submit efficacy data. The vaccine had been intended for adults ages 50 and older.

The FDA will also now require Moderna and Pfizer to expand warning labels with additional information about the risk of myocarditis after Covid vaccination. The vaccines currently carry warnings that the highest risk is for males between ages 18 and 24 (Moderna) or ages 12 to 17 (Pfizer). Both vaccines labels will now need to note the risk for males age 16 to 25.

The NEJM article is available here.

HHS Sets Most-Favored-Nation Pricing Target Price
On May 20th, the Department of Health and Human Services (HHS) announced specific price targets it expects pharmaceutical manufacturers to meet to satisfy the requirements of President Trump’s recent Executive Order (EO) on drug pricing. HHS expects manufacturers to meet MFN pricing targets for all brand products that do not currently have generic or biosimilar competition across all markets. HHS establishes that the Most-Favored-Nation (MFN) target price is the lowest price in an Organization for Economic Cooperation and Development (OECD) country with a gross domestic product (GDP) per capita of at least 60% of the U.S. GDP per capita. The HHS announcement indicates this will drastically bring down U.S. drug prices and that it looks forward to highlighting commitments from drug manufacturers in the coming weeks. An enforcement mechanism for MFN pricing is not contemplated, though the EO indicates that if prices do not drop to MFN target levels, the HHS Secretary will propose rulemaking to implement the pricing scheme. 

The announcement is available here. The original Executive Order is available here.

New York State Updates

Governor Hochul Provides Update on Impact of House Budget Reconciliation Package to NYS
This week, Governor Hochul issued a press release outlining anticipated impacts of the reconciliation package to New York State (NYS). Collectively, NYS projects that the bills will amount to annual loss of almost $13.5 billion for NYS and will result in over 1.4 million newly uninsured New Yorkers. The impact stems from: 

  • The House Ways & Means Committee bill, which eliminates premium tax credit eligibility for nearly half of the current Essential Plan (EP) enrollees and cuts more than 50% of the program’s funding (over $7.5 billion). NYS is obligated by the Aliessa court order to cover these individuals with State-only funds if need be, resulting in a further state budget impact of approximately $2.7 billion; and
  • The Energy & Commerce bill, which includes eligibility changes and targeted federal cuts to the Medicaid program (over $3 billion).

After the $7.5 billion loss of EP-only money, the potential fiscal impact on State funds is about $6 billion. NYS estimated that about $1.3 billion of this would impact hospitals directly, between reduced rates from Medicaid (rather than EP) coverage and uncompensated care provided to the newly uninsured.

The Governor’s press release is available here. Slides outlining the impact from a NYS Congressional Delegation Briefing are available here.

DOH Submits Final 1115 Waiver Amendment Request to Expand Workforce Program and Medicaid Buy-In for People with Disabilities 
On May 6th, the NYS Department of Health (DOH) submitted a final 1115 Medicaid Redesign Team (MRT) waiver amendment request to CMS. The amendment seeks to expand the Medicaid Buy-In Program for Working People with Disabilities (MBI-WPD) and increase flexibilities within the Career Pathways Training (CPT) Program, part of the New York Health Equity Reform (NYHER) waiver.

Medicaid Buy-in Program for Working People with Disabilities (MBI-WPD)
The Fiscal Year (FY) 2023-24 Enacted Budget included legislation to expand the MBI-WPD program and seek waivers necessary to do so. MBI-WPD offers working individuals with disabilities the opportunity to maintain financial independence through employment while retaining their Medicaid coverage, despite earnings that may otherwise make them ineligible. As approved in the FY 2023-24 Budget, DOH seeks to expand the current MBI-WPD by removing the age limit and increasing the income and resource limits. Specifically, the amendment would:  

  • Eliminate the age limit of 65 years (the minimum age of 16 remains);
  • Increase the maximum income from 250% of the Federal Poverty Level (FPL) to 2,250% of FPL;
  • Increase the maximum resources from the current Medicaid resource limit for non-Modified Adjusted Gross Income (MAGI) populations (currently $32,396 for a one-person household) to a flat level of $300,000;
  • Remove the consideration of income and resources of legally responsible relatives when determining MBI-WPD eligibility;
  • Implement a new income-based premium structure, with no monthly premium for individuals under 250% FPL and a premium cap not to exceed 8.5% of the individual’s income; and
  • Establish a program enrollment cap of 30,000 individuals.

Career Pathways Training (CPT) Program
The CPT program is a $646 million component of the NYHER waiver, approved in January 2024, which allows the Medicaid program to pay for workforce training programs as well as to reimburse employers for backfill costs for CPT program participants who are absent from work while fulfilling training requirements, in return for participants making a commitment to serve a high-need Medicaid/uninsured population. As part of this amendment request, NYS seeks to increase the number of allowable days of backfill payments from two days per week to up to five days per week, as the two-day limit “is not sufficient to cover absences required by more intensive programs associated with certain titles under the program.”

The State made no changes to the final amendment following a review and consideration of public comments received during the fall of 2024 on the proposed amendment. Some changes recommended in the public comment period, which are summarized in the final amendment request, will be monitored and considered for possible future implementation. Examples include changes to the proposed premium structure for the MBI-WPD program and expanding the list of titles to include long-term care workers for the CPT program.

The final amendment is available here. If approved by CMS, the State expects to implement the new MBI-WPD program in late spring 2026 and the CPT program adjustment after September 2025.

DOH Adopts Final Regulations on In-Person Requirements for Prescribing Controlled Substances
On May 21st, DOH adopted final regulations that clarify patient evaluation requirements for the issuance of controlled substance prescriptions and align New York’s language with recent changes in federal law. The regulations clarify that an in-person medical evaluation conducted by the prescribing practitioner is required before prescribing controlled substances, with the following exceptions:  

  • Telemedicine: The practitioner may prescribe certain controlled substances during a telemedicine (two-way audiovisual synchronous) visit pursuant to the federal Drug Enforcement Agency (DEA) telemedicine policy and all other relevant state and federal laws and regulations.
  • Consulting or Referring Practitioner: The practitioner may prescribe controlled substances after reviewing the patient’s record for the result of an in-person medical evaluation performed by a consulting or referring practitioner within the previous 12 months specific to the medical condition for which the prescription is being considered.
  • Covering Practitioner: A practitioner covering for the temporary absence of the initial prescriber may prescribe controlled substances, provided the covering practitioner is part of the same practice as the initial prescriber and has a direct and adequate consultation with the initial prescriber, who assures the necessity of continued controlled substance prescribing.
  • Emergency Situation: An existing patient develops a new medical condition that would warrant the issuance of a limited 5-day supply prescription for a controlled substance.

In response to public comment, DOH clarified that audio-only prescribing is permitted to the extent federal law allows. The final regulation also specifies that if a practitioner is prescribing, administering, or dispensing for the treatment of opioid use disorder as more than a minor part of their practice, compliance with Article 32 of the Mental Hygiene Law is required.

Note that the DEA has extended temporary telehealth flexibilities for prescribing controlled substances, including buprenorphine, through December 31, 2025 while delaying the implementation of two pending rules that would govern telehealth prescribing.

The final regulations are available here. Public comments received on the proposed regulations are available here.

Willow Baer Confirmed as Commissioner of OPWDD
On May 21st, Willow Baer was confirmed by the NYS Senate as the Commissioner of the Office for People with Developmental Disabilities (OPWDD). Ms. Baer has been serving as the Acting Commissioner since July 2024. Prior to this role, Ms. Baer served as Assistant Counsel to Governor Hochul, General Counsel to OPWDD, General Counsel and Deputy Commissioner for the Office of Children and Family Services (OCFS), and as Counsel to the NYS Justice Center.